[Updated 2:03 p.m. See below.] Rhythm Pharmaceuticals is selling a stomach drug for $200 million to Dublin-based Allergan, a deal that has been in the works since 2014.
Allergan is acquiring Motus Therapeutics (formerly Rhythm Health), which holds the rights to the gastrointestinal drug that aims to help the stomach empty more normally. Motus is a subsidiary of Boston-based Rhythm Holding Company, an entity that also houses Rhythm Pharmaceuticals, which is developing peptide-based treatments for rare genetic problems that lead to life-threatening metabolic disorders.
The deal has had little impact on Allergan’s stock (NYSE: AGN), which was up 62 cents as of 12:27 p.m. in New York from yesterday’s close of $221.99.
Allergan had an option to acquire Motus based on a deal that Rhythm struck with Actavis, the Dublin-based drug maker that merged with Allergan in 2015. Actavis paid Rhythm $40 million up front and snagged the option on the drug.
Allergan’s decision to exercise that option and purchase Motus was sparked by the release of results from a Phase 2b study into its experimental drug, relamorelin. It aims to treat a type of gastroparesis related to diabetes, in which the stomach doesn’t empty into the intestine quickly enough, leading to abdominal pain, bloating, and vomiting. In the Phase 2b trial, the drug was able to help with some problems associated with the condition, such as nausea, abdominal pain, and vomiting, according to a press release.
Showing a reduction in vomiting compared with the start of the trial was the study’s primary endpoint. While Motus found that patients who took relamorelin vomited 75 percent less than when they started the trial—regardless of how much they took—there was also an “unusually high” placebo response, the company said. The plan is to release the full results in 2017.
Still, it appeared the results were good enough for Allergan. Part of the company’s interest may stem from the FDA’s prioritization in finding a treatment for gastroparesis, calling it an urgent medical need, according to analysts from Boston-based Leerink. As many as 16 million Americans deal with some form of gastroparesis, and there’s currently only one treatment for it, Reglan (metoclopramide), the analysts wrote in a note to investors. That drug was approved in 1983, Allergan says.
Relamorelin is an injectable peptide drug derived from the hunger-simulating hormone ghrelin. Xconomy covered more of the drug’s backstory in 2014 when the deal with Actavis was struck. Rhythm has previously received an additional $7 million related to the option deal and to help pay for the Phase 2 trials, president Bart Henderson said. [Updated with comment from president.]
Ben Fidler contributed to this report.